Carriage revenue for MSOs on correction course

MUMBAI: Two cable TV distribution companies have said separately that their second-quarter revenue has seen a fall over the earlier-year period, signaling a correction in carriage fee income that they charge from broadcasters as channels jostle for space on their analogue networks.

Hinduja-owned IndusInd Media and Communications Ltd (IMCL), which runs its cable TV business under the Incablenet brand, has posted a revenue of Rs 755.20 million compared to Rs 811.67 million a year ago.
A subsidiary of Hinduja Ventures Ltd (HVL), IMCL‘s operating profit dropped 28.1 per cent to Rs 103.76 million for the three months through September.

IMCL forecasts an almost flat revenue growth over last year with carriage income stagnating, as broadcasters face the heat of an advertising slowdown.

Wire & Wireless (India) Ltd had earlier said its operating revenue fell 16.66 per cent to Rs 697.97 million for the second quarter. “A few carriage deals with broadcasters could not be firmed up during the second quarter. We hope to conclude them in the third quarter,” a source had told 
Multi-system operators (MSOs) have been bailed out by a fattening of carriage revenue over the last few years, luring them to expand geographically through the acquisition route. The promise of digitisation has also attracted private equity into the sector.

IMCL claims to have over 6.5 million subscribers across 27 major cities. During the quarter, Sangli Media Services became a subsidiary of IMCL.

MSOs have used carriage income to partially fund their digitisation and acquisition expansion. "Carriage is contributing to over 50 per cent of the MSO‘s revenue," the head of a leading MSO said.

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